EX-CHIEF OF STORE CHAIN SETTLES FRAUD COMPLAINT

The former head of a Detroit supermarket chain denied in a press release there was any reason for a surge in his company's stock while actually engaged in secret takeover talks with A&P, securities regulators charged.

Without admitting or denying wrongdoing, Paul Borman settled the civil complaint and agreed to a court order barring him from any further alleged violations of securities laws.No fines or penalties were imposed.

In a civil complaint filed at federal court in Washington, D.C., the Securities and Exchange Commission charged that Borman's Inc., operator of 83 Farmer Jack supermarkets in the Detroit area - and formerly in Utah - violated anti-fraud rules by allegedly issuing a false press release.

The charges stemmed from a sharp rise in trading of Borman's Inc. stock on the New York Stock Exchange in late November 1988.

When stock exchange officials inquired about the trading activity - Borman's stock rose more than three points to $12.75 - Borman issued a press release on Nov. 28 in which the Detoit-based Borman's said it "knows of no reason for such activity."

But the SEC charged that Borman, 58, the company's chief executive officer, knew he would be meeting within days with James Wood, A&P's chairman.

Wood unsuccessfully sought to acquire Borman's earlier that year and met with Borman two days after the press release was issued.

On Dec. 12, 1988, the companies announced that A&P offered to acquire Borman's at $27 per share. A&P completed the acquisition in 1989.

The SEC contended that Borman, now chairman of A&P's Midwest division, violated anti-fraud rules by issuing a press release that he knew or should have known was misleading to the investing public.

William R. McLucas, head of the SEC's Enforcement Division, said the action was significant because it reaffirms a policy the SEC stated about three years ago that "a company needn't promptly disclose merger negotiations, but when the company does speak, it must speak completely and accurately."